The market value of Fords' equity, preferred stock and debt are

$6

billion,

$5

billion and

$15

billion respectively. Ford has a beta of

1.3,

the market risk premium is

7%

and the risk-free rate of interest is

4%.

Ford's preferred stock pays a dividend of

$4

each year and trades at a price of

$26

per share. Ford's debt trades with a yield to maturity of

8%.

What is Ford's weighted average cost of capital if its tax rate is

25%?